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Informist, Friday, Aug. 8, 2025

 

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--SBI: No great concern on slippages in any sector 
--CONTEXT: Comments from SBI management in post earnings analyst concall 
--SBI: Corporate credit growth has been a challenge 
--SBI: Stick to 3% guidance on NIM for FY26 
--SBI: Do not see much impact on banks due to US tariffs 
--SBI: Auto segment not doing well, may pick up in Oct-Mar 
--SBI: Corporate growth to be around 10-11% in FY26 
--SBI: Couple of candidates for listing from our subsidiaries, no timeline yet 
 

 

By Kabir Sharma and Sagar Sen

 

MUMBAI – Corporate credit growth has been a challenge lately for the country's largest public sector bank, the management of State Bank of India said in a post-earnings analyst call on Friday. The bank's corporate loans grew at just 5.7% in the quarter ended June, far slower than the overall loan growth of 11.6% in the same period.

 

"Around 12,000 crores (INR 120 billion) is something what impacted the corporate in the current quarter by way of prepayments," the management of the bank said. "We also had a few large corporates accessing the CP (commercial papers) market because CP rates have become extremely competitive, and we would not have offered to give that rates."

 

The bank expects corporate loan growth to pick up in the second half of the year, owing to festival demand. For the full financial year 2025-26 (Apr-Mar), the bank expects its loan growth to be in the 10-11% range.

 

The bank still has a robust pipeline of corporate loans, the management said. "We almost have 7.2 lakh crore (INR 7.2 trillion) pipeline, both on the sanctions but not disbursed as well as proposals in pipeline, which gives us confidence that we will be able to get back to a double-digit corporate credit growth in the next quarter onwards," it said.

 

The management of the bank said it is sticking to the 3% guidance on net interest margin despite the blip in the current quarter. The domestic net interest margin shrank 13 basis points from the trailing quarter to 3.02% in Apr-Jun, and was sharply down from 3.35% a year ago. The net interest margin may fall further in Jul-Sept before it improves in Oct-Dec, the management said. "We will also have the full benefit of savings bank account rate reduction and the NIM contribution which will come from the CRR (cash reserve ratio) cut. So, we are sticking to our 3% guidance," it said. The Reserve Bank of India in June cut the cash reserve ratio by 100 bps to 3% of banks' net, demand and time liabilities. The cut, to be carried out in four tranches of 25 basis points each, is expected to infuse liquidity to the tune of INR 2.5 trillion into the banking system, RBI Governor Sanjay Malhotra had said.

 

The bank's Chairman C.S. Setty said there is no concern on slippages of the bank. "But let me also assure you that there is no concern on the asset quality in any of the segments we have not seen...there has been a significant pullback as we speak in the last 30 or 45 days," Setty said. The slippages in small and medium enterprise loans were at INR 26.80 billion, agriculture loans were at INR 24.64 billion, and personal loand were at INR 26.02 billion, the management of the bank said. Fresh slippages rose sharply to INR 79.45 billion from INR 42.22 billion in the trailing quarter, but were up less than 1% on year.

 

Setty said the US tariffs are unlikely to have an impact on banks, especially SBI. "...from a banking system perspective, (US tariffs) do not pose any systemic risk, because they are not very large exposures on this sector. Definitely for SBI, (there is) very, very minor exposure on these sectors," he said. 

 

The bank said it hopes that the unsecured personal loan segment and the auto loan segment, which did not do well in Apr-Jun will pick up in the second half of the current financial year. On the listing of its subsidiaries, the bank said it has a couple of potential candidates for listing, but the timeline is not very certain so far. "As we mentioned that we definitely have a couple of candidates for listing. But the timing is not very certain, there is no sense of urgency there, I believe," Setty said. 

 

India's largest public sector bank reported a net profit of INR 191.60 billion for the June quarter, up 12.5% on year and 2.8% sequentially. Shares of the bank ended 0.1% lower at INR 804.30 on the National Stock Exchange on Friday.  End

 

Edited by Tanima Banerjee

 

 

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